What does e + r = o mean?  I’ve never heard of it.  It’s the idea that highly successful people focus on influencing outcomes by controlling their reactions to events, instead of trying to control the events themselves.  e + r = o means “Event + Response = Outcome.” 
 
When it comes to investing, a lot of events are out of our control anyway.  Events like bull markets, bear markets, political turmoil and economic instability.  So how do we, as investors, influence control of our reactions to these events, events which are outside of our control?  We do so by having a clearly defined investment philosophy.  Market events are out of our control, but our response to them can be controlled.  And our investment philosophy prepares us for when these events occur to be proactive and not reactive with our retirement portfolios, allowing us to filter out short-term noise while focusing on long-term outcomes.
 
You can read this DFA article for more information.

The main theme for Q1 has been market volatility and what we can do to counteract its impact on us. The final page of the Q1, 2018 quarterly report makes a good analogy about how embarking on your financial plan is like sailing around the world.  Your voyage won’t always go as planned, and you’re sure to come across rough seas at times (in the form of market volatility and personal ups and downs), but the odds of reaching your destination increase greatly if you are prepared, flexible, patient, and well-advised.  We like to say: “if you fail to plan, you plan to fail.”

What is “noise?”
 
It’s the constant stream of good, bad, and indifferent thoughts and ideas from every stock market talking head and pundit.  Combined it becomes an endless supply of noise – like white noise when the cable went out (for those of you in your 20s you might not know what I’m referring to). 
 
Our job is to filter out that noise.  We’re here to take the worry out of investing.  Whether markets are making new highs, crashing back down, or resembling a roller coaster ride of ups and downs like we’ve seen over the last month plus, the key is to focus on your personal financial goals.  Don’t let the noise derail you; don’t let the noise derail your personal financial goals.  The noise doesn’t know you and it doesn’t know your financial situation, either.
 
Please enjoy this excellent video from Dimensional Fund Advisors about tuning out the noise...  

It’s a simple answer fortunately.  We stay invested; we don’t get out one day and get back in the next.  And we have a good reason why, too.  We know we can’t predict if the DOW will be down 875 points over two days only to bounce back 650 points the next day (this happened the last three trading days).  If we stay invested every day, we’ll get the good with the bad, and over the long-run, owning stocks give us more good than bad.  But if we try to pick when to be in the market or out of it, we can see how extremely hard it is to actually outperform being invested every day.
 
Take a look at this attachment or what is pasted below courtesy of IFA.com.  20 years of S&P 500 returns were analyzed, and the findings were: missing just a handful of days of returns drastically impacted returns.  We’re just not going to consistently guess right and avoid the losing days, but if we try, we subject ourselves to missing the good days, too.  And even just missing the 5 best days OUT OF OVER 5,000 days took the return from 9.22% down to 7%.  

The moral of the story is: stay invested every single day and grab the market’s return, over time it’s a good return and it will build wealth for your retirement portfolio.  But when you play the market timing game, the odds aren’t in your favor that you’ll consistently guess right, and when it comes to your retirement you don’t want it to be a guessing game.
 

So it's like those in the transaction based advisory world (banks, insurance companies, brokerage companies, independent firms like Edward Jones) essentially are saying we call our salespersons advisors, but, by definition, they're not actually advisors & they don't give advice, so they don't need to follow this annoying fiduciary rule thing...oh, and if you have any questions or maybe you're a bit confused by this, just ask your advisor!


Great article from Michael Kitces...


Product distribution industry beat DoL fiduciary by arguing their brokers aren't actually advisors! https://www.kitces.com/…/dol-fiduciary-5th-circuit-appeals…/ via @MichaelKitces